Pooling its resources

Since the turn of the century, the consumer electronics market has been a difficult one. Plummeting production costs in China, Taiwan and Korea, together with stiff competition from companies traditionally outside the sector – Apple’s iPod, for example – have led the sector’s established leaders to re-examine the deployment of all their resources. For Sony Europe this has included the resource of talent.

“There’s never a more important time to have effective talent management than when a company is facing tough times,” says Mark Wilcox, Sony Europe’s director of people and organisational development. “You have to be strategic about developing your talent so you know you’re getting value for money. At the same time, if you don’t develop that talent now then when your industry starts to recover, you won’t be able to capitalise on your position.”

In the past two years, Wilcox claims Sony Europe has moved from a position where the company didn’t really know what talent was – let alone where it was – to the implementation of an extensive talent pipeline running vertically through the organisation, developing and supporting high-fliers from graduate entry level all the way to incumbent executives at the most senior levels of the company.

Sony has around 10,500 employees across Europe. As Wilcox notes, it is impossible to deliver comprehensive talent management – or even career advice – to this number of people. While it may be philanthropic to offer support to every worker in every location, Sony’s approach to talent management recognised the need for the company to identify and grow the talent required to lead the company in the future. These individuals would not simply be remarkable at a local or country level, they would take international roles, providing the skills and overview required to take the company forward across Europe.

What the organisation did

Wilcox and his team identified four internal market segments where these individuals could be found. These were entry-level graduates, the ‘European Development Potential Pool’ (a group of graduate high-fliers with a few years’ company experience under their belts), the ‘Executive Successors Pool’ and finally, the incumbent executives themselves.

“These four areas require different forms of development and different kinds of succession planning,” notes Wilcox, “but what’s important is we’re no longer trying to deal with 10,500 employees, we’re dealing with 500 maximum.”

Moreover, these five hundred have been carefully assessed for inclusion in the talent management initiative – a change in approach which has had a significant impact at the European Development Potential Pool (EUDPP) level. In 2003, the company supported more than 150 people at this level. Over the course of six months, as a result of extensive assessment tests, more than 100 were removed from the group. Wilcox says the transition was only possible after the extensive development of in-house assessment skills across the continent.

“We spent nearly two years training all our European HR staff in assessment technology,” he says, “Three years ago the company was suspicious of assessment methods, now it is better understood and trusted.”

Where previously members would undertake a two-day assessment programme and receive feedback on their performance, applicants to the EUDPP can now fail the course and be denied access to the pool. Even before taking the test, candidates must demonstrate fluency in English as well as two other languages. They must have had international experience and have a good business degree from a respected college. But more significantly, they must have the drive and ambition to take on leadership roles at an international level.

“It’s become a very transparent process,” says Wilcox. “If you don’t want to move out of your geographical area then don’t apply for the EUDPP.”

Development methods

Across all four internal segments, Sony applies four development processes. The first is a conventional development programme comprising formal courses. At graduate level there is a two-year, eight module programme introducing the company and business practice in general.

Within the executive pool and among the executives themselves, the training delivered is increasingly tailored to individual demands and career aspirations.

The second process is known as ‘WorkStyle’ – the application of the management by objectives/competence-based performance appraisal tool used throughout Sony.

Third, the company uses objective assessment within all four talent pools.

At lower levels this two-day assessment is conducted through the assessment centre, but assessing incumbent executives has required a different solution. Working with search and selection specialists Egon Zehnder International (EZI), Sony created a blueprint for executive assessment based on the company’s leadership model. The ultimate question is posed: whether the incumbent executive would be on EZI’s shortlist if it was looking to fill that post.

Finally, Sony has established a mentoring and coaching network across all four talent pools. Incumbent executives coach their potential successors who, in turn, act as mentors to the EUDPP group. And the EUDPP members coach the graduate intake.

The outcome

“The intention has been to provide the coaching process and build it as a mental model for people in the business,” says Wilcox. “But it also creates visibility. The executives can see who is in the Executive Successor Pool and that visibility goes right down through the business. If someone is looking for talent to take on a new role, they can identify an individual who might be ready for the job.”

This coaching structure has effectively created an internal market for talent, which has taken the talent management initiative away from HR and established it as an effective tool through which the business can improve and grow.

Indeed, while internal mentoring and coaching networks are still being built, there is already a tangible demand for elements of the talent management initiative from the business itself.

Following the pilot executive assessments, the heads of Sony in Germany, France and the UK – all of whom had been through the process – asked that their senior teams should be assessed to give them access to this level of talent information. In some cases, the assessment process has identified individuals working in inappropriate roles, leading to the redeployment of talent with positive results.

“The company can now see how areas that were under resourced in terms of talent have been identified and how those areas have recovered,” says Wilcox.

In addition, the company has made a number of internal appointments at executive level as a result of the data collected through the initiative. Not only has this saved money in assessment and headhunting fees, but it has firmly established the idea that talent is rewarded within the organisation.

“We are using existing methodology,” notes Wilcox. “None of it is rocket science. The key to our success is that we are clear about what talent is – it’s about leadership and we have created a clear model of leadership for our business. The second important factor is that the structure covers the organisation from top to bottom.”

Ensuring an organisation’s leadership is secure isn’t just about supporting current executives, it requires a strategic long-term view. Some of the talent entering the organisation this year must be ready to take up the challenge of leading the company in 15 years’ time. With its comprehensive talent management framework, Sony has already started to invest in that future.